When bankruptcy Judge Arthur J. Gonzalez approved the sale of most of Chrysler’s assets to a new company run by Fiat, he also granted the request that the new company not face liability for future product-liability problems involving current Chrysler owners. This leaves owners of Chrysler, Dodge, or Jeep vehicles without the right to sue if they are injured by a safety defect.
Fiat argued in court filings that it was unfair to burden it with financial obligations from the original Chrysler. Chrysler’s CEO, Robert L. Nardelli, testified during the bankruptcy hearing that the idea of not allowing current owners to sue the Fiat-owned company came up during discussions between the Treasury and Fiat.
Consumer groups, including Public Citizen, the Center for Auto Safety, and Consumers for Auto Reliability and Safety, have objected, saying that granting the request deprives consumers of their rights. Judge Gonzalez dismissed the objection, but an attorney for the groups reports that they plan to appeal. The consumer groups are also concerned about individuals injured in accidents who have already filed suit alleging safety defects in Chrysler vehicles. Even if they win in court, those people have very little chance of recovering from the automaker after Chrysler’s debts are settled.
Law professors have expressed reservations as to whether the bankruptcy judge’s can remove an owner’s future legal rights without due process. Many citizens may support this law, at least at first glance, given Chrysler’s precarious position. But, if one’s loved one suffered serious injury or death because of a defective Chrysler vehicle, one may feel a bit differently about the law. Should a company be granted immunity from responsibility for building a defective product because of its financial status?